The roadblocks to the successful implementation or expansion of B2B ecommerce are, in many cases, more internal than external.
The technology to implement B2B ecommerce is tested and reasonably affordable, say ecommerce analysts. Moreover, business buyers are increasingly preferring more online than traditional ways to purchase goods and services for their organizations, according to analysts.
But many companies of all sizes won’t succeed at B2B ecommerce until they confront—and overcome—some big internal obstacles. An October survey of about 50 ecommerce sellers by Digital Commerce 360 B2B finds that 50% of companies rank a lack of funding as the top reason their organization isn’t engaged in digital commerce or growing at a faster pace. 38% of companies also say token or non-existent support from top management or the sales force is another big roadblock in the way of building or expanding ecommerce.
“Many organizations still don’t understand how significant of an impact ecommerce has on their business,” says Karie Daudt, senior commerce consultant at agency Perficient Digital. “There often isn’t a clear understanding that ecommerce done well can make the difference in the future success and failure of your business.”
Persuading executives to back ecommerce
To succeed in B2B ecommerce, organizations first must have a strategy in place that “sells” top management on the growth potential and return on investment B2B digital commerce can generate, Daudt says. “I find that aligning the investment and the budget companies have for this type of project with the ROI is key—without a digital background, it can be hard for leadership to understand the direct benefits a well-done ecommerce experience will provide, and how it will grow revenue moving forward,” she says. “Showing leadership that the road to success is powerful, they will commit to ecommerce because they can visualize their return on investment.”
Turtle & Hughes Inc., a Linden, New Jersey, distributor of electrical and industrial equipment, is about 18 months into its initial launch into digital commerce and expects as much as 20% of all sales to be online within the next year, says chief information officer Ajay Kamble.
But getting the organization started down the path to full-scale B2B ecommerce was a challenge on several levels, he says. When Jayne Millard, the CEO at Turtle realized the future of commerce and the urgent need for transforming the business, she named Ajay Kamble as a CIO and digital leader to kick start the digitization of a 95-year-old business in April of 2016.
As the CIO and digital manager, Kamble had the final say on devoting resources to launch ecommerce. He also had the backing of the CEO. But change doesn’t come easy, especially for companies such as old and established distributors with a mature sales force and nearly 100 years of selling a broad range of products through traditional channels such as Turtle & Hughes’s network of 18 distribution centers. The company sells such products as anchors, fasteners, cabinets and enclosures, cable-management items, fiber-optic cable, hand tools, power protection, duct systems and security fencing. “There is longevity in this business and some saw the internet as a fad, others as a career threat and others as costing too much money,” Kamble says.
Getting sales reps onboard
It took about four months to launch ecommerce, Kamble says. The company rolled out a new ecommerce platform, including product information management and content management systems, from Unilog Inc., and a product catalog enhanced with technology from Affiliated Distributors and new analytics technology from TopSpot Internet Marketing.
To convince skeptics within Turtle & Hughes that ecommerce was a promising new sales channel, the distributor’s ecommerce developers and information technology staffers pushed to bring the new ecommerce platform on quickly and continually add inventory—and be among the first distributors of electrical and industrial equipment to sell on B2B marketplaces.
Today, Turtle & Hughes has about 1 million SKUs in its online product inventory and is selling successfully on marketplaces as well as on its own ecommerce site at Turtle.com. The company’s all-in digital revenue “is now on par to compete with the traditional channels,” he says.
One way Kamble looked to show resistant internal employees that ecommerce can be a viable sales channel is by looking to achieve an early versus later return on investment by “getting some early big wins,” he says.
Another suggestion Kamble has for getting internal buy-in from various departments, especially the sales force, is by addressing the issue of compensation upfront. Many distributors are old, family-owned companies with the sales channel built on a sales force, relationship-building and the phone, mail and fax machine.
“Many sales reps are apprehensive ecommerce because they fear ecommerce may replace them or have an impact on their income,” Kamble says. “The web can free up manual processes that give reps more time to sell and allow them to make more money—that issue should be addressed very early on.”
Think profit center, not cost center
For ecommerce to be universally accepted by a company not used to digital technology, barriers fall when ecommerce is viewed as a sustaining and viable new sales channel. “Make ecommerce a profit center and not a cost center,” he says.
Turtle & Hughes is making good progress in building B2B ecommerce, a timely move given the increasingly digital purchasing habits of younger procurement managers, Kamble says. “There is a fundamental shift underway with buyer behavior,” he says.
But many other companies will continue to struggle with internal challenges if top management isn’t on board with growing ecommerce, says Lori McDonald, CEO of ecommerce services and website design firm Brilliance Business Solutions. “Where digital lacks buy-in from the CEO or senior leadership, other organizational leaders can share stories for how competitors are leveraging digital,” she says. “Ask your business leaders who are skeptical, why they don’t believe this will work for them and discuss their concerns—and discuss the risks of not taking action.”
Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and market research development, at [email protected] and follow him on Twitter @markbrohan.
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